The Lawful Benefit

The lawful benefit of the employee benefit trust established on the 23 December 1913 is a life pension if the male officer has completed 15 years of service.

This is confirmed by:

the original Trust Deed made on 23 December 1913

the consolidation Deed of Variation dated 6 May 1958, and

the Elder Smith & Co Limited Provident Funds Act 1963 (SA)

The consolidation Deed of Variation dated 6 May 1958 was vetted by a Select Committee of Legislative Council of South Australia that was chaired by the then Attorney-General, the Hon Colin Rowe MLC.

The Hon G. O’H Giles M.L.C. stated in the Minutes of Evidence for the Select Committee on the Elder Smith & Co Ltd Provident Funds Bill 1963 on 3 September 1963 following a question from the Attorney-General, the Hon Colin Rowe M.L.C.:

“ The present fund – that is, Elder’s Provident Fund – was established 50 years ago. It is one of the oldest Provident Funds in Australia. It is a pension fund, and not a Provident Fund in the lump sum sense. It provides pensions after 15 years of service. It provides death benefits, equal to three years’ salary, immediately after entry to the fund. The fund is designed to provide an attraction to people to join the company’s service, an encouragement to them to remain, and security for those officers who belong to the company and the fund”.

Mr Giles continues:

“ At present, there are 1,099 members of the fund and 106 pensioners, including two widowed pensioners. The only reason why there are only two widowed pensioners is that until comparatively recently the fund only provided a pension during the life of the officer after retirement. However, that was altered some little time ago to enable them to opt to have a survivorship pension in favour of their wife if they so wished. The fund has assets of £2,838,000”.

In a meeting of the Select Committee held on 10 September 1963, the Chairman, the Hon Colin Rowe M.L.C. confirmed:

“If a man had been 15 years in the company’s service and was retired, say, for redundancy he would be entitled to a pension under these rules, but if he left of his own accord, say to go to another job he would simply get back his own contributions plus interest”.

The Hon S.C. Bevan M.L.C then confirmed an important point in response to a question on the pension entitlement:

“Where he had been there for 15 years or more and the company retired him because they did not want him for some reason he would immediately become entitled to a pension”.

The Chairman interrupted:

“Irrespective of his age?”

The Hon S.C. Bevan M.L.C replied:

“Yes. That is covered by paragraph (d)”.

In his book “The Elder Smith Goldsbrough Mort Merger” {Australian National University Press Canberra 1970} G.A Manning who was a Trustee of The Provident Fund noted that one of the consequences of the merger was there were a number of long serving officers (about twenty in all) under the age of 60 whose roles became redundant.

G.A. Manning states on page 45:

“They received from their actual retirement date the normal retirement benefit, reduced for their actual age at retirement in accordance with the appropriate deed.”

This confirms what the Hon. S.C. Bevan M.L.C. stated in the Select Committee and is in accordance with the pension formula discussed further below.

When the fund was established in 1913 the Pension Formula was the classic pension formula used by many pension funds which was only related to years of service and salary.

However this formula discriminated against loyal employees who were unable to remain in the service until the early retirement age of 60, due to ill health or retrenchment.

In 1958 the pension formula was amended to improve the pension benefit received by male officers who were retrenched of were force to leave the service due to ill health.

The amended pension formula include the “Age when Leaving Service” so as to increase the pension of those who were forced to leave the service at an earlier age.

Copies of the Deeds of Variation that confirm the lawful pension benefit can be found here.